Nigeria: Minister Revokes 1,002 Mining Licences

Nigeria: Minister Revokes 1,002 Mining Licences

This Day (Lagos)

16 January 2008
Posted to the web 16 January 2008

Patrick Ugeh

In what stakeholders see as turning back the hands ofthe clock regarding the progress made in the comatose mining sector in the last two years, the Minister ofSolid Mines and Steel Development, Alhaji SarafaIshola, has ordered the revocation of all the 1002 mining titles issued last year.

And contrary to the Mineral and Mining Act 2007, which mandates the Mining Cadastre Office (MCO) with thatresponsibility, the Minister has now been grantedpowers as the final approving power for re-issuancefor new licenses.

This was done by a committee set upby him. A document dated 21st November, 2007, and signed bythe acting Permanent Secretary of the Ministry of Mines and Steel Development, Patrick H. Iwara andobtained by THISDAY yesterday said: "All currentmineral titles already issued by the MCO shall berecalled and reviewed before re-issuance on behalf ofthe Honourable Minister."

But in a quick reaction, an official of the Gemstones Entrepreneurs Association of Nigeria, who spoke oncondition of anonymity for fear of possible sanction,described the minister's action as a huge setback tothe industry.

The directive was sent to the Director General (DG) ofNigerian Geological Survey Agency (NGSA), the DG ofMining Cadastre Office (MCO) and Heads of Departmentof the Ministry.

"Further issuance of new titles have been suspendedforthwith until all issues are resolved", the directive read without stating the issues to beresolved.

The Federal Government issued 50 Mining leases and 952 Exploration Licences to foreign and Nigerian Firmsonly on May 18 2007 after the signing into law inMarch 2007 the Minerals and Mining Act.

The Cadastre Mining Office was set up under 5(1) ofthe Act, as an independent body mandated to infusetransparency and efficiency in the issuance of miningtitles after past Ministers had grossly abused theprocess.In protesting this action which they say has greatlyhurt the confidence their foreign partners have in thecountry, thus causing panic among their financiers,the association said: "Since this development, somebanks that gave us some facilities have gone intopanic and some of our foreign partners are scared thateven if we should get back our licenses, theirconfidence in policy continuation in Nigeria is badlyshaken." The technical committee set up by the Minister to lookinto this issues that led to the recommendatiuon ofthe review noted this implication in its report.The recommendation titled, Suspension of Issuance ofLicenses (i) and (ii) the committee said on page 2 :"The defects earlier raised notwithstanding, thesuspension of licenses already issued will sendnegative signals to local and foreign investors andother stakeholders. This will create a major setbackin the gains made so far in attracting investors intothe Nigerian mining sector. Its pertinent to note thatmany licenses have committed huge sums of money totheir work programmes and down-line negotiations havecommenced in many areas."The mining Cadastre is a system under development byseveral International Consultants under contractualagreement through the World Bank project. AnyDisruption of process may leadd to international lossof confidence and subsequent failure and colapsee ofthe cadastre system. This will be a major setback",the Committee noted to the Minister.The Minister of Solid Mineral and Steel Development,Alhaji Sarafa Tunji Isola, had during the last WestAfrican Mining Conference, in Abuja last month statedthat for Nigeria to become a respectable Solid Mineraldestination, not less than $10 billion worth ofinvestment annually over a couple years would beneeded from private firms.

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